IN INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI SANJAY ARORA, AM AND SHRI PAWAN SINGH, JM . I.T.A. No.3234 Mum 2015 ( Assessment Year: 2011-12) Sara Trans Export Corporation ITO, Ward 16(3)(4), nd J-404, Congress House, V. P. Road, 2 Floor, Matru Mandir, Opera House, Mumbai-400 004 Vs. Tardeo Road, Mumbai-400 007 . . PAN GIR No. ABDFS 1919 C ( Appellant) : ( Respondent) Appellant by : Shri Bhavin Parekh Respondent by : Shri Vishwas Jadhav : 30.5.2016 Date of Hearing : 22.9.2016 Date of Pronouncement O R D E R Per Sanjay Arora, A. M.: This is Appeal by Assessee directed against Order by Commissioner of Income Tax (Appeals)-30, Mumbai ( CIT(A) for short) dated 21.1.2015, dismissing Assessee s appeal contesting its assessment u s.143(3) of Income Tax Act, 1961 ( Act hereinafter) for assessment year (A.Y.) 2011- 12 vide order dated 12.3.2014. 2. assessee s appeal is delayed by one day. same stands explained by ld. Authorized Representative (AR), assessee s counsel, during hearing, which find as reasonable. appeal was, accordingly, admitted and proceeded with. 3. We have heard parties, and perused material on record. 2 ITA No. 3234 Mum 2015 (A.Y. 2011-12) Sara Trans Export Corporation vs. ITO 3.1 sole issue arising in instant appeal is correct amount of deduction exigible to assessee in respect of its eligible undertaking u s. 10AA of Act, i.e., established in Special Economic Zone (SEZ). assessee s SEZ Unit also admittedly making local sales (at Rs.186.79 lacs) for current year, question arose as to manner of exclusion of profit qua said sales in-as-much as benefit u s. 10AA is only in respect of profit derived from export (outside India) of articles or things or services. Act envisaging such situation, has provided for same per sub section (7) of section 10AA, which reads as under: Special provisions in respect of newly established Units in Special Economic Zones. 10AA. (1) .. (2) (6) .. (7) For purposes of sub-section (1), profits derived from export of articles or things or services (including computer software) shall be amount which bears to profits of business of undertaking, being Unit, same proportion as export turnover in respect of such articles or things or services bears to total turnover of business carried on by undertaking: Provided that provisions of this sub-section as amended by section 6 of Finance (No. 2) Act, 2009 (33 of 2009) shall have effect for assessment year beginning on 1st day of April, 2006 and subsequent assessment years. This, then, explains Revenue s case, which has determined deduction u s. 10AA by applying ratio of Export Turnover to Total Turnover of business of said undertaking (i.e., 0.85446) to total profit of said business (Rs.160.75 lacs), on both of which, i.e., ratio and total profit, there is again no dispute. assessee s case is that same can be dispensed with in-as-much as it has prepared separate profit and loss accounts for local and export turnover. Further, no defect has been pointed out therein by Revenue, so that same should be accepted as such. 3.2 issue is of proper manner of determining profit derived by assessee s SEZ unit from exports, to which only deduction u s.10AA extends. 3 ITA No. 3234 Mum 2015 (A.Y. 2011-12) Sara Trans Export Corporation vs. ITO provision contemplating that export turnover of SEZ Undertaking may not agree with its total turnover, has prescribed pro rata formula on basis of turnover. said prescription, which is even otherwise reasonable, is thus mandate of law, which therefore has to be honored. It provides no saving or exclusion thereto. On contrary, it is rather assessee which is obliged to show that same results in absurdity toward which we observe no contention or claim, for same to be not observed. Mere hardship which again has not been shown, i.e., even if so, would be no ground for not observing clear prescription of law. Final accounts are prepared only source and, thus, business-wise (s. 70), to which law per s. 10AA(7) accords credence. There is, in our view, no scope for any ingenious method for determining export profit as may be devised by assessee, in view of clear and unambiguous language of provision, which is in sync with scheme of Act as well as accounts are normally prepared. Further, there is no claim of it being anomalous or resulting in any absurdity and, rather, is only reasonable. Tax laws are to be strictly construed; statute being edict of Legislature, representing it s intent, and toward which ld. CIT(A) has cited several decisions, and even as reiterated recently once again by Hon'ble jurisdictional High Court in Humayun Suleman Merchant vs. CCIT [2016] 73 taxmann.com 2 (Bom). We, accordingly, uphold concurrent findings and decisions by Revenue authorities. We decide accordingly. 4. In result, assessee s appeal is dismissed. Order pronounced in open court on September 22, 2016 Sd - Sd - (Pawan Singh) (Sanjay Arora) Judicial Member Accountant Member Mumbai; Dated : 22.09.2016 . . . Roshani, Sr. PS 4 ITA No. 3234 Mum 2015 (A.Y. 2011-12) Sara Trans Export Corporation vs. ITO Copy of Order forwarded to : 1. Appellant 2. Respondent 3. ( ) CIT(A) 4. CIT - concerned 5. , , DR, ITAT, Mumbai 6. Guard File BY ORDER, (Dy. Asstt. Registrar) , ITAT, Mumbai Sara Trans Export Corporation v. ITO, Ward 16(3)(4), Mumbai